Circular Letter CVM/SRE 04/23

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Seven of September Street, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Cincinato Braga Street, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br

Circular Letter No. 4/2023-CVM/SRE
Rio de Janeiro, March 24, 2023

Subject: General guidelines on procedures to be observed by intermediary institutions in applications for registration as coordinators of public distribution of securities.

Dear Director,

This Circular Letter aims to guide intermediary institutions regarding the application for registration as coordinator of public distribution of securities in accordance with CVM Resolution No. 161/2022 (“RCVM 161”).
Compliance with the following guidelines will contribute to minimizing any deviations and, consequently, to reducing the need for consultations with the regulator or the formulation of requirements by the SRE.
This document consolidates the guidelines provided by the SRE regarding RCVM 161 in previous circular letters, including the guidelines of Circular Letter No. 2/2022-CVM/SRE (“Circular Letter 02/22”), published on 12/28/2022. The new guidelines are highlighted in yellow.

I – Of the registration application:

We alert that the 180-day period referred to in art. 23 of RCVM 161 ends on 07/01/2023, a little more than 3 months from the publication of this Circular Letter. Intermediaries that have not applied for registration as coordinator of public distribution by this date will not be able to act in the coordination of public distributions in accordance with CVM Resolution No. 160/2022 unless they obtain the respective coordinator registration.
As established in art. 6 of RCVM 161, the application for registration of coordinator of public distribution must be sent to the Securities Registration Superintendence – SRE.
Art. 8 of RCVM 161 provides for the possibility of CVM entering into a technical cooperation agreement for the prior analysis of the registration applications referred to in art. 6 of the same resolution. In this context, CVM entered into an agreement (“ACT”) with ANBIMA - BRAZILIAN ASSOCIATION OF FINANCIAL AND CAPITAL MARKET ENTITIES, for the registration and supervision of public distribution of securities and their coordinators within the scope of CVM Resolution No. 160/2022 and RCVM 161.
The aforementioned ACT provides for the provision of subsidies for the analysis of this Autarchy in applications for registration of coordinators of public distribution of securities, as provided for in art. 8 of the Resolution.
We communicate that from January 2, 2023, the submission of applications for registration of coordinators of public distribution must be made through the Market Supervision System (SSM) of ANBIMA, with access at https://ssm.anbima.com.br.
The analysis of registration applications will be conducted in observance of the deadlines established in RCVM 161. In the analysis stages, the deadline will be divided between ANBIMA and CVM, in accordance with the ACT, with the certainty that (i) ANBIMA will have a maximum period of 50 (fifty) days to carry out the procedures assigned to it; and (ii) CVM will be guaranteed a period of 10 (ten) days to carry out the procedures assigned to it, in consonance with the provisions of art. 8 § 5 of RCVM 161. If ANBIMA concludes its routine in less than 50 (fifty) days, the remaining period may be used by CVM (i.e., CVM will count with the unused balance by ANBIMA, in addition to its 10 (ten) regulatory days), always respecting the total period of 60 (sixty) days stipulated by RCVM 161 for the conclusion of the procedure.
National, state, or municipal holidays in Rio de Janeiro, headquarters of CVM, will not be counted as business days for the calculation of the deadline.
Also, force majeure and fortuitous events, as provided for in national legislation, will not be counted as business days for the calculation of the deadline.
The submission of new documents or resubmission of documents with more updated versions after the initial protocol or after the fulfillment of requirements, that is, when the analysis of the registration application by ANBIMA or CVM is underway, will be interpreted as a new protocol and the analysis deadline for the current phase will restart.
If, in addition to the information and documents presented in compliance with the requirements, relevant changes have been made to documents or information that do not result from the fulfillment of requirements, the provisions of art. 7, § 6 and § 7 of RCVM 161 must be observed, characterizing the occurrence of a new fact.
Furthermore, in order to assist interested parties in obtaining registration, we indicate accessing the SSM system user manuals available on the ANBIMA website.
Finally, we clarify that being an ANBIMA member or adhering to the entity's Public Offers code is not a condition for obtaining registration as Coordinator of Public Offers.
We highlight that non-financial institutions registered as Coordinators of Public Offers will only be able to act as coordinators in public offers subject to the automatic registration routine if they are subject to supervision by a self-regulatory entity that enters into a specific technical cooperation agreement with CVM, in accordance with art. 3, § 1 of RCVM 161. We inform that to date CVM has not yet entered into a specific technical cooperation agreement for supervision with any self-regulatory entity, which will be duly disclosed by the SRE when it occurs.

II – Of the delivery of periodic information referred to in articles 12 and 18 of RCVM 161:

The annual periodic information, (i) reference form, the content of which must reflect all 6 (six) items of Annex B as determined in article 12 of RCVM 161 and (ii) internal controls report of article 18 of the same resolution, must be delivered in the year following the year in which the coordinator of public distribution obtained approval of its registration at CVM, considering the date of publication of the declaratory act in the Official Gazette of the Union.
We emphasize that the provision of the information of item 6 of Annex B, as established by Annex A of RCVM 161, is not necessary at the time of the application for registration of coordinator of public distribution of securities. It is necessary to send it only at the time of compliance with article 12 of the Resolution.
The information related in the previous paragraph must be provided from the year following the obtaining of the registration, even if this occurs, for example, only in the month of December.
These periodic information must be sent, through an electronic system available on the CVM website on the worldwide web. The link to the system will be available in the CVMWeb menu.

III – Of the minimum net equity:

The coordinator must prove, at the time of the registration application, that it has a minimum net equity of R$ 1 (one) million, by presenting financial statements audited by an independent auditor registered with CVM. If the institution has not closed its first fiscal year, an interim financial statement, also audited, must be sent in order to provide proof of the minimum net equity.

IV – Of the segregation of activities:

Item I of the sole paragraph of article 19 states that “the exercise of intermediation of public distribution of securities must be segregated from other activities carried out by the coordinator itself or by other legal entities of its economic group with which there is a potential conflict of interest”.
With regard to this, in addition to the areas described in item II of § 1 of article 4, it is up to the coordinator to identify which areas could affect the independence of its performance as a coordinator of public distribution of securities.

V – Of the non-requirement of certification of directors:

Item 5.4.1, b, of Annex B of Resolution CVM No. 161/22, that is, approval in a professional certification exam, is not a mandatory item.

VI – Of the Registration Fee:

To make the payment of the registration fee, the applicant must access the internet page https://cvmweb.cvm.gov.br/SAR/FormPesqGRU.aspx, fill in their CNPJ (only with digits) in the field referring to Initial Registration and click on “Search”.
In the next window, under “Fee Type”, the option referring to Annex V must be selected. Under “Registration Type”, the option “Coordinators of Securities Offers” must be chosen.
Check in the net equity ranges published in the form indicated in the link above, the one in which the net equity of your company would be classified according to your most recent annual financial statement audited by an independent auditor with registration at CVM.
We reinforce that at the time of the protocol of the registration request, the registration fee must already be paid when requesting registration through SSM.

VII – Of the responsible directors:

After the completion of the prior analysis referred to in section I of this circular by ANBIMA, a technical report will be sent to the SRE, which in turn must manifest itself regarding the approval or disapproval of the request.
When sending its technical report to the SRE, ANBIMA will keep at the disposal of CVM the information and documents that based its report, including the information regarding the responsible directors.
Therefore, in the case that the SRE understands the approval of the application for registration of coordinator of public distribution, the Superintendence (GER-3) will register the Coordinator and its directors in the CVM Coordinators System.

VIII – Of access to the Coordinators system:

In addition to serving as a tool for the registration of coordinators, the Coordinators System will also be the means used to request changes in registration or cancellation of registration, in accordance with articles 12 and 18 of RCVM 161.
For the coordinator to access the aforementioned CVM system, it will be necessary for its directors to register in the CVMWeb system.
Once registered, to access the Coordinators System, the responsible directors will need to go to the section of the CVM website called SYSTEMS and (i) click on “Registration Update”, (ii) log in to CVMWeb and (iii) access the system “Securities Offer Coordinator”.

IX – Of the scope of performance as a registered Coordinator:

We clarify that the registration referred to in RCVM 161 authorizes registered institutions to act exclusively as coordinators of public distribution of securities distributed by the routines defined in CVM Resolution No. 160/2022.
This authorization does not allow the regulated entity to act as an intermediary in any other modality of distribution of securities, whether primary or secondary, carried out in a stock exchange, commodities and futures exchange, organized over-the-counter or unorganized over-the-counter.

X – Of the restrictions on accumulation of functions of responsible directors:

Item II of § 1 of article 4 of RCVM 161 aims to avoid potential conflicts of interest in the accumulation of functions by the directors responsible for public distribution intermediation activities and for compliance with rules, policies, procedures and internal controls.
Therefore, in its wording, the device cites, in an exemplary manner, functions that could not be accumulated, precisely because they characterize a situation of potential conflict of interests and reduction of independence, such as (i) administration of securities portfolios, (ii) securities consulting and (iii) fiduciary agent activity.
Said this, and with the purpose of facilitating the identification by the regulated of the practical situations in which the accumulation of functions by these directors represents a conflict of interests, we inform that among the activities that cannot be accumulated by the director responsible for public distribution intermediation activities, are also those of (a) distribution, (b) treasury and (c) proprietary or third-party trading desk.
If the regulated is facing a situation related to the accumulation of the positions of director of public distribution intermediation or director of compliance with rules, policies, procedures and internal controls not described above, it is recommended that, if, in its judgment, it visualizes a potential conflict of interests, consult the SRE, directed to GER-3, to seek clarifications.

XI – Of portfolio managers and securitization companies:

RCVM 161 maintained the possibility of portfolio managers carrying out the public distribution of securities issued by funds administered or managed by them and of securitization companies carrying out the public distribution of securities of their own issuance, according to the rules established in CVM resolutions that specifically deal with these regulated entities, respectively, CVM Resolution No. 21 (RCVM 21) and CVM Resolution No. 60 (RCVM 60), without requiring such participants to obtain the registration of coordinator of public distribution.
Thus, such participants, since they are not covered by RCVM 161 (art. 1, sole paragraph, IV), are not subject to the transition rule provided for in art. 23 of RCVM 161 to carry out the public distribution of securities described in the previous paragraph.
Finally, it is emphasized the need for such participants (i) to respect the rules described in specific norms - RCVM 21 and RCVM 60 – in the conduct of public distribution of securities, (ii) to carry out the distribution of securities in accordance with RCVM 160 and (iii) to respect RCVM 161 specifically with regard to conduct rules, as determined in specific regulation (article 33, item I, letter “e” of RCVM 21 and article 43, item I, letter “d” of RCVM 60).

XII – Of Coordinators that do not have a board of directors in their corporate structure:

In the absence of a board of directors, the responsibilities mentioned in art. 4, § 2 of RCVM 161 may be carried out in board of directors or partners meetings, through minutes registration and provided that such documents are registered with the competent authority.

XIII – Of hiring of autonomous investment agents / investment advisors:

The registration as coordinator of public distribution of securities of NON-financial institutions, in accordance with art. 3, II of RCVM 161, does not allow, under any circumstances, for these non-financial institutions registered as coordinators of public distribution to hire Autonomous Investment Agents (“AAI”) or Investment Advisors (“AI”), as they will be called from July 1, 2023, with the entry into force of CVM Resolution No. 178/2023 and revocation of CVM Resolution No. 16/2021.
The AAIs or AIs are linked to their own regulatory and self-regulatory system, CVM Resolution No. 35/2021 (RCVM 35), which disregards NON-financial institutions. These institutions are not covered in several provisions of RCVM 35, such as, for example, (i) the supervision of the self-regulator ANCORD, (ii) the specific supervision of the self-regulator BSM over the acts practiced by these AAIs or AIs, and (iii) the obligations of the intermediary to supervise the structures and internal controls of the AAI or AI.
Nothing prevents, however, that AAIs or AIs act in public distribution of securities coordinated by coordinators of public distribution that are not financial institutions, as long as contacted by financial institutions participating in the distribution consortium
If additional clarifications are necessary, contact the Registration Management 3 – GER-3, through the electronic address ger-3@cvm.gov.br.

Sincerely,

LUIS MIGUEL R. SONO
Superintendent of Securities Registration

Document electronically signed by Luis Miguel Jacinto Mateus Rodrigues Sono, Superintendent of Registration, on 03/24/2023, at 17:40, based on art. 6 of Decree No. 8.539, of October 8, 2015.

The authenticity of the document can be checked on the site https://super.cvm.gov.br/conferir_autenticidade, informing the verification code 1744032 and the code CRC 472C4D1A.
This document's authenticity can be verified by accessing https://super.cvm.gov.br/conferir_autenticidade, and typing the "Verification Code" 1744032 and the "CRC Code" 472C4D1A.
Reference: Process No. SRE Circular Letters 2023 SEI Document No. 1744032

Circular Letter CVM/SRE 04/23

Lineage: In force

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